Derivatives · glossary
A level below which a floating rate is not counted. The loan treats EURIBOR below zero as zero. Atlas declined a floor on the swap, priced at about €20,000 a year, and the Confirmation records that choice. Rate Definitions: Floor · Chapter 2
Explained in Chapter 2, The Swap, Line by Line, of Derivatives.
An option is one-way. The buyer pays a fee once, called the premium, and after that it only receives. On an interest rate, a cap pays the buyer when the rate is above an agreed level, and a floor pays when it is below one. Atlas will buy a cap.Read Chapter 1, What a Derivative Is →
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